COMMENTARY | The Detroit Tigers have announced an agreement with Max Scherzer on a one-year deal to avoid arbitration. Multiple outlets have reported the deal to be worth $6.725 million, the mid-point between Scherzer's asking price of $7.4 million and the team's offer of $6.05 million.
The move is not particularly surprising as general manager Dave Dombrowski has never gone to salary arbitration since taking over the helm of the Tigers in 2002.
According to Cot's Contracts, the deal puts the Tigers' payroll at $145.425 million for 18 players. The rest of the 25-man roster will likely be filled out with guys making the MLB minimum ($490,000). That will bring total player payroll just a little short of $150 million.
There's little doubt Scherzer was once a dominant pitcher in 2012. WAR gives a pretty good snapshot of where a player ranks among his peers. It's not a perfect statistic, but it can start a conversation. Scherzer was likely somewhere between the 9th (with 4.0 WAR according to Baseball-Reference) and 14th (with 4.6 WAR according to FanGraphs) best pitcher in the American League.
Scherzer will have one more year of arbitration eligibility before hitting the open market, so why not lock him up with a long-term deal?
There are a number of factors at play, but the most important reason is the Tigers are in win-now mode.
Impending Free Agents
Current Tigers that will be eligible for free agency in 2015 (the year Scherzer becomes eligible): Justin Verlander, Victor Martinez, Torii Hunter, and Phil Coke.
Jhonny Peralta, Joaquin Benoit, Omar Infante, Octavio Dotel and Ramon Santiago all become free agents after this season.
Miguel Cabrera becomes a free agent in 2016.
Obviously, the Tigers probably aren't interested in retaining all of those guys beyond their current contracts. It would be a surprise if the Tigers pursued any of Martinez, Hunter, Peralta, Dotel or Santiago.
The most important name on that list is Verlander. He has said that he wants to play his entire career in Detroit, but it is entirely possible his next contract could be worth over $200 million.
The Tigers' current roster has a two-year window to win the World Series before there will be a need for a major overhaul. By my count, there are only 10 players on the 25-man roster whom are signed beyond 2014.
Payrolls of $150 million are likely only profitable for the Tigers with extended postseason runs. Forbes lists the team as having $8 million in operating revenue last year after three straight years of operating losses.
The Tigers reported over 3 million fans visited Comerica Park last season, and had a playoff run to the World Series. Despite all of those positives, the team barely broke even.
Nobody is saying Mike Ilitch is running out of money, and signing contracts like Prince Fielder's 9-year, $240 million deal certainly doesn't seem like somebody who is short on cash.
In fact, there are reasons to believe the Tigers could continue operating with a profit, even with an inflated payroll. Bill Shea, of Crains Detroit Business, points out the growth in national TV revenue. The Tigers can expect to see an additional $26 million in revenue beginning in 2014.
One thing Ilitch might be running short on is time. He is 83 years old and wants to win a World Series ring. He told Bob Wojnowski of the Detroit News last year that his life would be incomplete without one.
Ilitch has won the Stanley Cup four times with the Red Wings, but his Tigers have come up short in two World Series appearances. It is clear that he is willing to subsidize the Tigers' payroll, if necessary to win the elusive World Series. However, it is not clear how long he will be around.
It's entirely possible that whoever takes over the Tigers will continue the free-spending ways, but there is a definite sense of urgency for the organization right now.
With Scherzer under team control through 2014, a looming extension to the best pitcher in baseball and an aging owner, Dombrowski made a wise decision in simply signing Scherzer to a one-year deal rather than a multi-year extension.
Patrick McIntyre is a freelance sports reporter who has followed the Tigers closely since 2000.